Dear all,
Kindly find below an update with regards to the developments in Cyprus.
Latest Developments
Cyprus-Russia
- According to Reuters, Cyprus has asked for a new 5 billion euros loan from Russia, along with the alteration of the terms of the existing one, expiring in 2016 (a five-year extension of the existing 2.5 billion euros loan as well as the decrease of the interest rate, currently at 4.5%).
- Cyprus is turning to Russia, hoping that -despite the 'hit' between the two countries' relations following Anastasiades' decision to team-up with Eurogroup for the deposits' levy- the climate of trust will be restored.
- The Cypriot government is hoping that by offering Cypriot banks, participation in the exploitation of hydrocarbons and port facilitations and continuation of the banking services, to Russia, it will manage to secure the necessary funds to safeguard the sustainability of the Cypriot debt, which constitutes a requirement of the Memorandum.
- The Cypriot Finance Minister Michalis Sarris, who is in Russia and rejected yesterday reports of his resignation, has reportedly stated earlier today that the negotiations with Russia are in progress, that a good start was made and that no agreement has been reached yet. A Press Conference that was scheduled for 12 noon today by the Cypriot Finance Minister has been cancelled.
- Cypriot President Nikos Anastasiades had a 30-minute talk with Russian President Vladimir Putin yesterday late evening. As announced, the two leaders held a fruitful discussion regarding the two countries' economic relations. It is noted that according to press reports, Mr. Anastasiades had attempted many time to talk with the Russian President.
Plan B
- Cypriot Minister of Internal Affairs, Socrates Hasikos, speaking at Greek TV earlier this morning, said that Troika is not accepting the 'Plan B' presented by Cyprus, which entails providing State's reserves, funds from loans from insurance funds or insurance companies, other banks, etc.
- The Government's Spokesperson, Christos Stylianidis, reportedly said earlier today that a team of experts from each political party will participate in a meeting at the Central Bank of Cyprus in order to discuss a 'plan B'.
- Cypriot President Nikos Anastasiades is meeting with Troika's representatives today.
Cypriot banks
- No decisions have been made yet with regards to the three Cypriot banks in Greece.
- According to sources, all three systemic banks (NBG, Alpha Bank, Piraeus Bank) have reportedly submitted offers to the HFSF for all Cypriot banks, whereas TT is expected to act as a "back-up". It is noted that according to sources, Alpha Bank had initially expressed interest only for Bank of Cyprus.
- The Greek government and the regulatory authorities in Greece are reportedly sending the message that Greece has a range of options available, in order to safeguard the domestic banking system's stability.
- As reported, it is possible that the Cypriot banks will be closed until Friday – instead of Thursday as initially said.
- Cypriot Minister of Internal Affairs, Socrates Hasikos, speaking at Greek TV earlier this morning, estimated that the most likely scenario is that the two major banks, CPB and Bank of Cyprus, will not open again, whereas the smaller banks will reopen, according to regulations.
Reactions to the decision of the Cypriot Parliament
Eurogroup
- Following the rejection of the deposits levy by the Cypriot Parliament, Eurogroup's President Jeroen Dijsselbloem made the following announcement: "I take note of the decision of the Cypriot parliament on the government's proposal for a one-off stability levy. I confirm that the Eurogroup stands ready to assist Cyprus in its reform efforts and reiterate the position of the Eurogroup as I stated yesterday."
- In an interview to a Dutch TV channel, Mr. Dijsselbloem reportedly said that the eurozone's bailout proposal for Cyprus still stands and won't be more than the previously agreed upon amount of 10 billion euros. "Cyprus was granted some freedom, but it will have to settle with the maximum amount of 10 billion euros," Mr. Dijsselbloem said, adding that he was disappointed by the outcome of the vote. "The conditions of the proposal are still valid. The ball is now really in Cyprus's court," he said.
European Commission – IMF – ECB
- No announcements were made by the European Commission nor the IMF so far, with representatives refusing to comment on the developments. It is reported that the EC, which was taken by surprise following yesterday's rejection, is waiting to see how talks between Cyprus and Russia will evolve, before taking an official position on the issue.
- The ECB reportedly gave a time extension to Cyprus, confirming that it would not stop liquidity to the Cypriot banks, after having taken into consideration the Parliament's vote. The ECB said that in order to continue to grant liquidity to the Cypriot banks is to secure their solvency.
Germany
- A close associate of German Chancellor reportedly rushed to say yesterday, after the voting, that there will not be a rescue plan and help to Cyprus if the requirements are not met.
- German Finance Minister reportedly expressed his sadness for the decision of the Cypriot Parliament to reject the deposits' levy plan, adding that no one else but Cyprus is responsible for the country's current situation.
Press coverage
Today's press coverage in Greece and Cyprus continues to be extended, focusing on the decision of the Cypriot Parliament, the possible consequences to Eurozone and the potentials with Russia.
Main Greek Newspaper headlines
- Ethnos: Dramatic hours for Cyprus and Europe. They are both seeking for a 'plan B'
- Eleftheros Typos: Cyprus dared a 'no' to Germany
- Kathimerini: The 'no' is a test to Cyprus and Eurozone
- Naftemporiki: Cyprus' 'no' is changing things in Eurozone
- Imerisia: Rapid developments
- Ta Nea: Two options: dead-end and Putin
Main Cypriot Newspaper headlines
- Fileleftheros: Two rescue scenarios
- Haravgi: A dignity 'no'
- Alitheia: Russian roulette
- Simerini: The flirt with Russia gives a light at the end of the tunnel
- Cyprus Mail: The MPs are rejecting the bailout agreement
We will update you for any further developments.
Kind regards,
Marianna
Marianna Tantele
Account Manager
Financial Communication & Retail
V+O COMMUNICATION
A 91 Michalakopoulou str., 115 28 Athens, Greece
T +30 211 7501219
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